American Rescue Plan Modifications FFCRA Paid Go away Choices

By Last updated Mar 23, 2021

The employer’s obligation to provide paid sick and family leave under the Families First Coronavirus Response Act (FFCRA) ended on December 31, 2020. On December 27, 2020, President Trump signed the Consolidated Appropriations Act of 2021 (CAA), with the The extended payroll tax credits have been made available to employers who voluntary decided to continue granting FFCRA leave until March 31, 2021. Last week, President Biden signed the American Rescue Plan Act of 2021 (Rescue Plan). Among other things, the rescue plan expands the availability of wage tax credits for employers until September 30, 2021. For employers who continue to opt for FFCRA-type vacation, the rescue plan makes some significant changes to the FFCRA’s approach to both paid To implement sick leave (two weeks / up to 80 hours of paid leave) as well as in relation to family and sick leave (originally up to 10 weeks of paid family and sick leave).

Changes in paid sick leave

The rescue plan resets the 10-day / 80-hour limit for paid sick leave from April 1, 2021. If employees previously exhausted their FFCRA paid sick leave entitlement, they now have an additional 10 days / 80 hours to use.

The rescue plan also adds three additional qualifying reasons for paid sick leave. These include:

Receiving a COVID-19 vaccine;
Recovery from illness or condition related to the COVID-19 vaccine; or
Finding or waiting for the results of a COVID-19 diagnosis or a COVID-19 test if either the employee has been exposed to COVID-19 or the employer has requested the test or diagnosis.

Changes to family leave and medical leave

One major change is that the rescue plan removes the requirement that the first two weeks of Family Vacation and Medical Emergency (EFML) not have to be paid. When an employee qualifies for EFML, they are entitled to a full 12 weeks of paid vacation (provided they have not previously taken any EFML or other FMLA Family and Sick Leave Act). Consistently, the Revenue Plan increases the overall ceiling for EFML from $ 10,000 to $ 12,000.

Another important change is the broadening of the qualifying reasons for using EFML. Currently, employees can only use EFML if they need time off to look after a child whose school or daycare is closed for COVID-19 reasons. However, as part of the rescue plan, EFML may be used for any of the qualifying reasons listed under Paid Sick Leave. This means that an employee who qualifies for Paid Sick Leave and needs leave in excess of the 10 day Paid Sick Leave Entitlement can take up to 12 weeks of EFML (provided they have not previously taken EFML or time off under uses the FMLA). In practice, an employee could potentially take a total of 14 weeks of paid FFCRA vacation after April 1, 2021.

Finally, the bailout plan includes non-discrimination language for both paid sick leave and EFML. The penalties come in the form of losing the tax credit option. If an employer chooses to voluntarily grant FFCRA leave and discriminates in terms of leave: (1) in favor of high paid workers; (2) in favor of full-time employees; or (3) the length of employment prevents the employer from receiving tax credits for vacation paid under the FFCRA.

With this new benefit comes a big question for employers – whether to extend these FFCRA credits to employees? Given the benefit of paid time off, it is worth considering encouraging employees to be vaccinated and ensuring the safety and health of their workforce by encouraging COVID-related absences due to exposure and illness. (And being able to do this without such a financial blow to the company is a huge plus).

However, employers need to be prepared to potentially give workers 14 weeks of vacation time. It is not currently clear whether employers can choose what types of paid vacation they will grant under the FFCRA. For example, some employers may want to offer the two weeks of paid sick leave but not the 12 weeks of EFML. We know that failure to comply with a requirement of the Extended Family Leave and Medical Leave Act or the Paid Sick Leave Act will exclude the employer from obtaining vacation tax credits under either act. When this rule is coupled with non-discrimination language, it appears that an employer could potentially choose to offer paid sick leave or emergency family and sick leave, or both. However, it is important for employers to understand that they must follow all of the provisions for each vacation option. This means that employers can only grant one type of leave, which is employers can not Change the rules; You cannot choose the qualifying reasons for the vacation or make other changes to the way the vacation should be applied.

The provisions of the rescue plan related to the FFCRA will come into effect on April 1, 2021. We anticipate that the Department of Labor and / or the Internal Revenue Service will issue additional guidance or FAQs to assist employers with some of these open questions, and we will continue to provide updates as we learn more.